Dec 13, 2017 | Coding, Billing, and Collections, Instruments & Equipment, Laboratory Instruments & Laboratory Equipment, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Sales and Marketing, Laboratory Testing
Recognizing the need to serve patients with high-deductible health plans, hospital systems are opening healthcare centers in outpatient settings where patients can receive care and undergo procedures—including clinical laboratory tests—more conveniently and for less cost
Health systems are putting medical imaging services, such as MRIs, in strip malls and shopping centers as a way to make it easier for patients. Such locations can also offer lower-cost procedures because of lower overhead compared to imaging centers located in hospitals. This trend to offer patients more convenient service at a lower cost is something that clinical laboratory managers and pathologists should watch and understand.
One driver behind this trend is the growing number of Americans enrolled in High Deductible Health Plans (HDHPs), where deductibles can exceed $6,000 for individuals and $12,000 for families. With such high deductibles, patients are now keenly focused on the cost of their healthcare. Medical laboratories and anatomic pathology groups have been impacted by this trend, as more patients shell out cash to pay for walk-in procedures and providers must collect full payments for services rendered.
Hospitals and health systems recognize the increased demand for outpatient, lower-priced medical services, along with price transparency. Patients with HDHPs are one reason why hospital bad debt is growing.
Healthcare Shopping Drives Lower Costs and Convenience
Price shopping on the Internet for medical services also is becoming more popular due to the availability of online doctor and facility ratings and easily-accessible price comparisons.
There are more than 7,000 stand-alone imaging centers in the US that operate independently of hospitals. About 70% of diagnostic imaging services occur in hospital settings with the other 30% performed in outpatient facilities.
According to Amino, a healthcare transparency company based in San Francisco, the cost for an MRI can vary significantly depending on where a patient lives and what type of facility is utilized for the test. Their research found that the cost of a limb MRI can range from hundreds of dollars at a freestanding facility to as much as $4,000 at a hospital. In some states, the price difference between getting an MRI at a hospital versus a stand-alone facility was almost $2,000. The average cost of having an MRI performed in a hospital setting is $2600.
Based on data from Amino, the graphic above illustrates the wide range of prices for MRIs throughout the country, and the cost disparity between hospital and free-standing medical imaging centers. In the future, pathologists and clinical laboratory managers can expect to see the publication of similar graphs that show the variation in the cost of clinical laboratory tests and anatomic pathology procedures, not just by state, but by individual laboratories. (Graphic copyright: MBO.)
Smart Choice MRI, based in Mequon, Wis., charges a maximum price of $600 for an MRI. The company now has 17 locations in Illinois, Minnesota, and Wisconsin, but plans to have 90 facilities within the next three years.
“The rise of high deductible health plans has fueled consumers who understand their options and demand a higher level of service from their providers,” Rick Anderson, Chief Executive Officer of Smart Choice MRI told the StarTribune. “Quality, service-focused care at a fair, transparent price has never been more important.”
Anderson added that his company can handle 94% of MRI procedures in their convenient, freestanding imaging facilities.
“I think the quality is very good, but we’ve combined the cost and quality, and most importantly the convenience of being in the neighborhood where people are shopping,” Anderson said. “If you look at our Richfield (Minnesota) location, we’re literally next to SuperTarget, Caribou Coffee, Noodles and Company, and Qdoba.”
Public and Private Health Insurers Shift Payments to Free-standing Facilities
Anthem recently announced they will no longer pay for outpatient MRIs and CT scans performed at hospitals in almost all of the states where the health insurer does business. They are requiring patients to have the tests performed in free-standing imaging facilities in an effort to cut costs and lower premiums. This change could affect 4.5 million people in 13 of the 14 states Anthem serves, with New Hampshire being the exception.
Diagnostic imaging is not the only medical service transitioning to outpatient facilities.
In July, the Centers for Medicare and Medicaid Services (CMS) announced that it is considering payment approval for total hip and knee replacements performed in outpatient settings. This change could go into effect as early as next year.
According to Steve Miller, Chief Operating Officer at Ambulatory Surgery Center Association, an estimated 25-50% of joint replacements could be performed on an outpatient basis.
“There’s more and more comfort among surgeons who are coming out of residencies where they trained to do surgeries on an outpatient basis,” Miller told Modern Healthcare. “The volumes are doubling year over year.”
Surgeons Approve of Free-standing Surgery Centers
There are currently more than 5,500 ambulatory surgery centers in the country and upwards of 200 of those facilities are performing outpatient joint replacement procedures. Three years ago, there were only around 25 facilities providing these services.
In 2015, there were more than 658,000 total hip and knee replacements performed on Medicare beneficiaries, according to CMS data. In 2014, the government paid more than $7 billion for the hospitalization costs of these two procedures. The CMS estimates that the cost for uncomplicated knee replacement surgeries in 2018 will be $12,381 for an inpatient procedure and $9,913 for the outpatient rate.
Physicians feel that performing joint replacements in outpatient facilities could reduce costs by up to 50%.
“I could do maybe 20% of my Medicare patients on an outpatient basis, as long as they have the support and structure at home to help them recover,” said Matthew Weresh, MD, a physician at Des Moines Orthopedic Surgeons (DMOS) in the Modern Healthcare article. “It’s a great move by Medicare.” DMOS plans to begin performing joint replacements at an ambulatory surgery center later this year.
Pathologists would be wise to monitor this trend and anticipate how anatomic pathology services might shift towards lower-cost settings. For clinical laboratories, this trend further illustrates the need to prepare for more consumers paying cash for their medical services and seeking cost-effective, high-quality options.
—JP Schlingman
Related Information:
Coming Soon to a Strip Mall Near You: An MRI Provider
MRI Competition Heats up in Twin Cities
Anthem’s New Outpatient Imaging Policy Likely to Hit Hospitals’ Bottom Line
Free Standing Imaging Center and Hospitals
Need an MRI? It Pays to Shop Around. Big Time.
Hospitals Leery of CMS Proposal to Pay for Joint Replacements in ASCs
Dec 11, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement, Management & Operations
While proposals might change before the final CMS draft, lobbyists see potential for improving Medicare payment totals and structures in the upcoming 2018 outpatient rule and physician fee schedule
At this time, efforts by medical laboratories to lobby and educate Medicare officials and members of Congress about the flaws in the Medicare program’s market study of what private health insurers pay for clinical laboratory tests have failed to trigger positive action on this matter. But despite the bad news concerning that issue, there is a positive development with a proposed rule that would change which lab tests should be included in bundles paid under the Hospital Outpatient Prospective Payment System (OPPS).
The details of how the clinical laboratory industry worked to educate the right decision-makers within the federal Centers for Medicare and Medicaid Services (CMS) was part of a story published by Axios. The story described how several different healthcare specialties conducted educational and lobbying campaigns and succeeded in getting favorable decisions on the matters of concern.
Changing the Medicare 14-day Medical Lab Test Billing Schedule Regulation
Though the complete Axios article covers several categories of healthcare lobbying, “The Win for Clinical Labs” section lists lobbying activities in 2017 on behalf of the medical laboratory industry. It covers:
· “Who met with the feds: Lobbyists with lab testing companies Myriad Genetics and Veracyte, pharmaceutical company Boehringer Ingelheim, and lobbying firm Todd Strategy, federal meeting records show.
· “What they wanted: An open comment period on the ‘14-day’ regulation, likely with the goal of adjusting or eliminating it, according to a lobbying presentation.
· “The 14-day regulation stipulates that if lab tests are ordered within 14 days of a patient’s discharge from a hospital, the hospital must bill Medicare for the tests. The lab then seeks payment from the hospital. Anything after 14 days, the lab can bill Medicare directly.
· “The companies argued in the presentation that the rule limits access to lab tests because hospitals may be reluctant to bill Medicare for labs after patients leave.
· “What they got: An open comment period, and a modification to the policy that would allow labs to bill Medicare directly for some tests.”
One success slated to enter the OPPS relates to the 14-day rule/Date of Service (DOS) determinations, which set strict billing requirements for diagnostic tests based on when the tests are ordered. Medical laboratories, pharmaceutical companies, and lobbying strategists teamed up to streamline the current regulations and improve how billing works for a range of Advanced Diagnostic Laboratory Tests (ADLTs).
Lobbying participants included:
· Biodesix of Boulder, Colo.;
· Boehringer-Ingelheim of Ridgefield, Conn.;
· Guardant Health Inc. of Redwood City, Cali.;
· LUNGevity Foundation of Chicago;
· Myriad Genetics of Salt Lake City, Utah;
· Veracyte of South San Francisco.
The graphic above was taken from a May 2017 presentation to policymakers at HHS and CMS, which focused on delays created by the 14-day rule. It described existing determinations as “developed for the old world of hospital and reference laboratories.”
Presentation speakers also cited concerns that current payment requirements might limit access to testing and delay diagnosis. As precision medicine often involves major illnesses—such as cancer—swift testing, diagnosis, and treatment are essential parts of improving patient outcomes.
Results of the Lobbying Effort Could Bring Relief for Hospitals and Clinical Laboratories
CMS posted their proposed OPPS rules for 2018 in July and created an open comment period, which closed in September.
In analysis of the current proposed rules at Health Law and Policy Matters noted, “The proliferation of molecular pathology testing technology, coupled with the implementation of the packaging policy a few years ago, has strained relationships between many hospitals and laboratories.”
The analysis outlined three currently proposed approaches from CMS:
· The first crates exceptions to current DOS rules for molecular pathology tests and ADLTs under certain conditions.
· The second only applies exemptions to ADLTs citing a lack of “access to care” concerns for molecular pathology tests.
· The third adds an exception for molecular pathology tests and ADLTs excluded from OPPS packaging, but applicable to “under arrangements” rules.
Other Lobbying ‘Wins’
Axios noted two other potential wins related to this year’s lobbying efforts.
1. Fresenius Medical Care, owner of National Cardiovascular Partners, opened public debate regarding pay rates for heart procedures in outpatient heart labs and ambulatory surgery centers.
2. CMS and HHS awarded Photocure, manufacturer of Cysview (FDA-approved technology for the detection of bladder cancer), a proposal for add-on billing codes to increase pay for bladder cancer procedures using their drug solutions.
However, these are just proposals. There is no guarantee they will reach the final draft for 2018—if at all.
Lobbying Expensive but Gets Results
While lobbying is an important way to shape the regulatory landscape surrounding healthcare, it is time- and money-intensive. In the presentation from Todd Strategy, LLC, regarding the 14-day rule, the speakers established a timeline spanning two years of administration and congressional outreach. They also pointed out that similar requests were made in 2016 for the calendar year 2017 OPPS rules that were never implemented.
As healthcare continues to shift toward personalized approaches, and diagnostic testing becomes an increasingly important aspect of diagnosing and treating disease, laboratories and healthcare groups must continue to identify opportunities to both increase revenue and streamline operations to continue growing.
With innovative medical laboratory tests and new diagnostic technologies emerging at a rapid pace, the opportunity to use lobbying to educate lawmakers and government regulators continues to be a viable tool for clinical laboratories interested in speeding change and protecting the ability of clinical laboratories to serve physicians and their practices—particularly because the system is known for its complex requirements and slow-moving bureaucracy.
—Jon Stone
Related Information:
The Subtle Lobbying Wins in Medicare’s Outpatient Rule
Impact of Date of Service “14 Day” Rule on Diagnostics
Hospital Outpatient Prospective Payment – Final Rule with Comment and Final CY2017
14 Day Rule Frequently Asked Questions
CMS May Decide to Permit Labs to Bill for Certain Tests Provided to Outpatients
Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs
Your Quick Guide to Understanding the Weird 14 Day Rule (CMS Billing for Lab Tests)
Date of Service (DOS) for Clinical Laboratory and Pathology Specimens
Nov 29, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Sales and Marketing, Laboratory Testing, Management & Operations
Medical laboratories today struggle to submit clean claims and be promptly and adequately reimbursed as health insurers institute burdensome requirements and audit more labs
Across the nation, clinical laboratories and anatomic pathology groups of all sizes struggle to get payment for lab test claims. Veteran lab executives say they cannot remember any time in the past when medical laboratories were challenged on the front-end with getting lab test claims paid while also dealing on the back-end with ever-tougher audits and unprecedented recoupment demands.
These issues center upon the new policies adopted by the Medicare program and private health insurers that make it more difficult for many clinical laboratories to be in-network providers, to obtain favorable coverage guidelines for their tests, and to have the documentation requested when auditors show up to inspect lab test claims. This is true whether the audit is conducted by a Medicare Recovery Audit Contractor (RAC) or a team from a private health insurer.
Source of Financial Pressure on Medical Laboratories in US
Another source of financial pressure on medical laboratories in the United States today is the ongoing increase in the number of patients who have high-deductible health plans—whether from their employer or from the Affordable Care Act’s Health Insurance Marketplace (AKA, health exchanges). The individual and family annual deductibles for these plans typically start at around $5,000 and go to $10,000 or more. Many labs are experiencing big increases in patient bad debt because they don’t have the capability to collect payment from patients when they show up in patient service centers (PSCs) to provide specimens.
Some of these developments make it timely to ask the question: Is it a trend for payers to gang up on clinical laboratories and pathology groups and make it tougher for them to be paid for the lab tests they perform? Multiple factors can be identified to support this thesis.
“Is it a coincidence that, in recent years, so many payers are initiating numerous requirements that add complexity to how labs submit claims for lab tests and how they get paid?” asked Richard Faherty of RLF Consulting LLC. Faherty was formerly Executive Vice President, Administration, with BioReference Laboratories, Inc. “I can track four distinct developments that, collectively, mean that fewer lab claims get paid, expose clinical laboratories to extremely rigorous audits with larger recoupment demands, and heighten the risk of fraud and abuse allegations due to use of contract or third-party sales and marketing representatives who represent independent medical lab companies.”
Faherty described the first of his four developments as prior-authorization requirements for molecular and genetic tests. “Health insurers are reacting to the explosion in molecular and genetic testing—both in the number of unique assays that a doctor can order and the volume of orders for these often-expensive tests—by establishing stringent prior-authorization requirements,” he noted.
More Prior-Authorization Requirements for Molecular, Genetic Tests
“At the moment, many clinical lab companies and pathology groups are attempting to understand the prior-authorization programs established by Anthem (which became effective on July 1) and UnitedHealthcare (which became effective on November 1),” explained Faherty. “Just these two prior-authorization programs now cover as many as 80 million beneficiaries. There are plenty of complaints from physicians and lab companies because the systems payers require them to use are not well-designed and quite time-consuming.
“One consequence is that many lab executives complain that they are not getting paid for genetic tests because their client physicians are unable to get the necessary prior authorization—yet the lab decides to perform the test to support good patient care even though it knows it won’t be paid.”
Richard Faherty (left), CEO, RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc., will moderate this critical webinar. Joining him will be Rina Wolf (center), Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc., and Karen S. Lovitch (right), JD, Practice Leader, Health Law Practice, Mintz Levin, PC, Washington, DC. The webinar takes place Wednesday, December 6, 2017, at 2 p.m. EST; 1 p.m. CST; 12 p.m. MST; 11 a.m. PST. Click here to register. (Photo copyright: Dark Intelligence Group.)
Payers Checking on How Clinical Laboratories Bill, Collect from Patients
Faherty’s second trend involves how medical lab companies are billing and collecting the amounts due from patients. “Most payers now pay close attention to how clinical laboratories bill patients for co-pays, deductibles, and other out-of-pocket amounts that are required by the patients’ health plans,” he commented. “Labs struggle with this for two reasons.
“One reason is the fact that tens of millions of Americans currently have high-deductible health insurance plans,” said Faherty. “In these cases, medical laboratories often must collect 100% of the cost of lab testing directly from the patients. The second reason is the failure of many independent lab companies to properly and diligently balance-bill their patients. This puts these labs at risk of multiple fraud and abuse issues.”
Many Medical Lab Companies Undergoing More Rigorous Audits by Payers
Faherty considers trend number three to be payers’ expanding use of rigorous audits of lab test claims. “In the past, it was relatively uncommon for a clinical lab company or pathology group to undergo audits of their lab test claims,” he observed. “That has changed in a dramatic way. Today, the Medicare program has increased the number of private auditors that visit labs to inspect lab test claims. At the same time, private health insurers are ramping up the number and intensity of the audits they conduct of lab test claims and substantially increasing their demands for recoupment without audit.
“One consequence of these audits is that medical laboratories are being hit with substantial claims for recoupment,” noted Faherty. “I am aware of multiple genetic testing companies that have been hit with a Medicare recoupment amount equal to two or three years of the lab’s annual revenue. Some have filed bankruptcy because the appeals process can take three to four years.”
Are Contract Lab Sales Reps More Likely to Offer Physicians Inducements?
Faherty’s fourth significant trend involves the greater use of independent contractors that handle lab test sales and marketing for clinical lab companies. “This trend affects both labs that use third-party lab sales reps and labs that don’t,” he said. “Labs that use contract sales and marketing representatives do not have direct control over the sales practices of these contractors. There is ample evidence that some independent lab sales contractors are willing to pay inducements to physicians in exchange for their lab test referrals.
“This is a problem in two dimensions,” noted Faherty. “On one hand, clinical lab companies that use third-party sales contractors don’t have full control over the marketing practices of these sales representatives. Yet, if federal and state prosecutors can show violations of anti-kickback and self-referral laws, then the lab company is equally liable. In certain cases, government attorneys have even gone after executives on a personal basis.
“On the other hand, I am hearing lab executives complain now that a substantial number of office-based physicians are so used to various forms of inducement offered by third-party sales representatives that the lab’s in-house sales force cannot convince those physicians to use their lab company without a comparable inducement. If true, this is a fundamental shift in the competitive market for lab testing services and it puts labs unwilling to pay similar inducements to physicians at a disadvantage.”
These four trends describe the challenges faced by every clinical laboratory, hospital laboratory outreach program, and pathology group when attempting to provide lab testing services to office-based physicians in a fully-compliant manner and be paid adequately and on time by health insurers.
Why Some Labs Continue to Be Successful and What They Can Teach You
These four trends may also explain why many medical lab companies are dealing with falling revenue and encountering financial difficulty. However, there continue to be independent lab companies that have consistent success with their coding, billing, and collections effort. These labs put extra effort into aligning their business practices with the requirements of the Medicare program and private health insurers.
To help pathologists and managers running clinical laboratory companies, hospital lab outreach programs, and pathology groups improve collected revenue from lab test claims and to improve lab compliance, Pathology Webinars, LLC, is presenting a timely webinar, titled, “How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices.” It takes place on Wednesday, December 6, 2017 at 2:00 PM EDT.
Three esteemed experts in the field will provide you with the inside scoop on the best responses and actions your clinical lab and pathology group can take to address these major changes and unwelcome developments. Presenting will be:
· Rina Wolf, Vice President, Commercialization Strategies, Consulting and Industry Affairs, XIFIN, Inc. in San Diego; and,
· Karen S. Lovitch, JD, Practice Leader, Health Law Practice, Mintz Levin, PC, in Washington, DC;
· Moderating will be Richard Faherty of RLF Consulting LLC, and formerly with Bio-Reference Laboratories, Inc.
Special Webinar with Insights on How Your Lab Can Collect the Money It’s Due
To register for the webinar and see details about the topics to be discussed, use this link (or copy and paste this URL into your browser: http://pathologywebinars.com/how-to-prepare-your-lab-for-2018-essential-insights-into-new-payer-challenges-with-lab-audits-patient-billing-out-of-network-claims-and-heightened-scrutiny-of-lab-sales-practices/).
This is an essential webinar for any pathologist or lab manager wanting to improve collected revenue from lab test claims and to improve lab compliance. During the webinar, any single idea or action your lab can take away could result in increasing collected revenue by tens of thousands even hundreds of thousands of dollars. That makes this webinar the smartest investment you can make for your lab’s legal and billing/collection teams.
—Michael McBride
Related Information:
How to Prepare Your Lab for 2018: Essential Insights into New Payer Challenges with Lab Audits, Patient Billing, Out-of-Network Claims, and Heightened Scrutiny of Lab Sales Practices
Risk, Compliance, Pay—A Juggling Act for Labs
Continued ‘Aggressive Audit Tactics’ by Private Payers and Government Regulators Following 2018 Medicare Part B Price Cuts Will Strain Profitability of Clinical Laboratories, Pathology Groups
Threats to Profitability Causing Clinical Laboratories, Pathology Groups to Take on Added Risk by Entering into ‘Problematic’ Business Relationships and Risky Pricing Plans
Payers Hit Medical Laboratories with More and Tougher Audits: Why Even Highly-Compliant Clinical Labs and Pathology Groups Are at Risk of Unexpected Recoupment Demands
‘Death by 1,000 Knives’ Could Be in Store for Clinical Laboratories, Pathology Groups Not Prepared to Comply with New Medicare Part B Regulations
Nov 6, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory Pathology
Medical laboratory leaders must take steps to protect their lab’s financial stability and know how to prepare and respond to investigations and regulatory threats
Clinical laboratories and anatomic pathology groups may soon face a new normal that includes more frequent and tougher audits by both private payers and the government, resulting in larger monetary demands. The financial strain medical laboratories will experience from more aggressive audits will be compounded by the roll out on January 1, 2018, of new Medicare Part B price cuts.
Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins, LLC, in Cleveland, says audit activity has been “ramping up” during the past 18 months, but has accelerated in recent months.
“We are seeing a dramatic increase in the number of audits and the dollar amount the payers are trying to recoup as a result of those audits,” Cooper said in an interview with Dark Daily, noting monetary demands can reach “seven to eight” figures.
“We’re seeing that with both government payers as well as commercial payers and we’re seeing much more aggressive audit tactics being utilized than we have in the past.”
Payers Put Clinical Laboratories Under Increased Scrutiny
While toxicology/pharmacogenomics and molecular/genetic testing laboratories frequently are the targets of the increased scrutiny, Cooper says no medical laboratory is immune from questioning. The “medical necessity” of providing and billing for diagnostic tests or services, and laboratory waivers of “patient responsibility” for copays and deductibles, are the two most common compliance issues being cited, states Cooper, who points to Cigna, UnitedHealthcare and Blue Cross Blue Shield as among the most active commercial payers his firm encounters.
“There are large dollars at stake and they are going after those dollars,” Cooper explains.
In this new environment, Cooper maintains medical directors and lab executives must:
- Protect the lab’s financial stability in 2018 by considering operational changes and taking other steps to prepare for revenue losses due to PAMA (Protecting Access to Medicare Act).
- Get educated about practices that can trigger audits by commercial payers, or state and federal regulators, and consider conducting self-audits using an independent third-party.
- Know how to respond if a lab is charged with proficiency test violations, which can result in significant penalties from Centers for Medicaid and Medicare Services (CMS), such as loss of a lab’s CLIA license and revocation of the medical director’s license to operate a medical laboratory for two years.
- Expect scrutiny of “piggyback” arrangements with toxicology labs that could raise compliance concerns and violate commercial payer contracts. A “piggyback” arrangement is where a lab bills under the payer contract of another provider because it is unable to contract with the payer directly. This often involves “piggybacking” on lab or hospital (usually Critical Access Hospital) contracts. In many cases, the billing entity does not perform the lab services for which they are billing. The services are instead performed by the non-participating lab, and the billing provider pays most of the collections back to the non-billing laboratory, retaining a fee for using the contracts. There may not be disclosure to the payers about which entity actually performed the test.
Navigating Tougher Clinical Laboratory Laws and Regulations
To help medical laboratory and pathology group leaders prepare for the perils they face, and take proactive steps to navigate the tough lab regulations and legal issues that lay ahead, click here to register for Dark Daily’s upcoming webinar “Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More,” (or place this link into your browser: https://ddaily.wpengine.com/product/tougher-lab-regulations-and-new-legal-issues-in-2018-more-frequent-payer-audits-problems-with-contract-sales-reps-increased-liability-for-clia-lab-directors-proficiency-testing-violations-and).
Attorney Richard S. Cooper, Co-chair, National Healthcare Practice Group, McDonald Hopkins LLC, in Cleveland will be a featured speaker and moderator during a new Dark Daily webinar on the Medicare Part B price cuts, and the critical legal and compliance issues clinical laboratories and pathology groups face starting in 2018. (Photo copyright: McDonald Hopkins LLC.)
This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST.
Cooper, who will moderate the webinar, will be joined by David W. Gee, JD, a Partner at Davis Wright Tremaine LLP in Seattle, and Jeffrey J. Sherrin, JD, President and Partner, O’Connell and Aronowitz in Albany, New York.
These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.
You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all labs today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.
—Andrea Downing Peck
Related Information:
Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More
What Every Lab Needs to Know about the Medicare Part B Clinical Laboratory Price Cuts That Take Effect in Just 157 Days, on Jan. 1, 2018
Nation’s Most Vulnerable Clinical Laboratories Fear Financial Failure If Medicare Officials Cut Part B Lab Fees Using PAMA Market Price Data Final Rule
Nov 1, 2017 | Coding, Billing, and Collections, Compliance, Legal, and Malpractice, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing, Managed Care Contracts & Payer Reimbursement
Medical laboratory leaders and pathologists must be fully aware of the coming legal and regulatory changes taking place starting January 1, 2018, or risk fines and decreased reimbursements
January 1, 2018, marks the start of new Medicare Part B price cuts for clinical laboratory and anatomic pathology testing. But decreasing reimbursement rates is just one issue facing medical laboratory leaders. The other is the increasingly rigorous regulatory environment poised to ensnare labs and pathology groups unprepared to navigate the dark waters of government compliance.
Tougher payer audits, higher recovery demands, and enforcement policies that increase the personal liability of CLIA lab directors and lab executives, are reasons why attorney David W. Gee, JD, a Partner at Davis Wright Tremaine LLP in Seattle, argues that laboratories need to step up their focus on compliance and due diligence. He notes laboratories must guard against “death by 1,000 knives” in this new landscape.
Insufficient Focus on Compliance Brings Consequences to Clinical Laboratories and Their Management
“There are more and more people and agencies whose focus it is to regulate and watch the dollars and make sure there is integrity in the system,” noted Gee in an interview with Dark Daily. “That includes not only the formerly regular players—the OIG [Office of Inspector General, US Department of Health and Human Services] and DOJ [Department of Justice]—but you’ve got an increasing number of states with their own False Claims Acts. You’ve got state agencies looking at opportunities to clean up the system and to tag along with other investigations going on, as well as commercial payers who have become more active in pursuing litigation and other measures against practices they allege to be fraudulent.”
Faced with these emerging trends, Gee stresses that labs must:
1. Recognize the increased personal liability facing lab directors, owners, and management, and take steps to mitigate risk of enforcement actions that not only expose executives to potential penalties but also jeopardize the financial health of lab organizations.
2. Understand the importance of meaningful and sustained investment in compliance (including providing compliance officers with the resources to manage an increasingly complex job) and leverage OIG guidance to assess gaps and risks in compliance programs.
3. Be aware of risks inherent in third-party marketing agreements, which can result in short-term spikes in order volume, but which also could reduce “lines of sight” to clients, making it even more difficult to adhere to compliance standards.
Gee believes the emphasis labs place on cost control and “running lean” often results in a lack of attention being paid to compliance. He argues today’s competitive environment increases the need for laboratory directors to ensure proper business practices are followed and “compliance fundamentals are not overlooked in the haste to compete for the business of referral sources.”
Healthcare attorney and Partner, David W. Gee, JD, of Davis Wright Tremaine, LLP, in Seattle will be one of three featured speakers during a new Dark Daily webinar on the Medicare Part B price cuts, and the critical legal and compliance issues clinical laboratories and pathology groups face starting in 2018. (Photo copyright: Davis Wright Tremaine, LLP.)
CLIA-Lab Directors to Be Held Personally Liable for Compliance Failures
Because federal regulators are considering holding CLIA-lab directors personally liable for compliance failures, Gee suggests laboratory executives should be motivated to put effective compliance programs in place.
“The best reason I can give for insisting as a lab director that the company actually has a successful and effective compliance program is that these days they stand to lose,” he argues. “The ability to prove you are not complicit—and that you are not the driver of things that have gone wrong—comes down to having an effective and well-documented compliance program so you are on record. And so there’s evidence that, as an engaged lab leader, you tried to do the right thing.”
Educational Opportunities for Lab Leaders
To help medical laboratory and pathology group leaders prepare for the perils they face, and take proactive steps to navigate the tough lab regulations and legal issues that lay ahead, click here to register for Dark Daily’s upcoming webinar “Tougher Lab Regulations and New Legal Issues in 2018: More Frequent Payer Audits, Problems with Contract Sales Reps, Increased Liability for CLIA Lab Directors, Proficiency Testing Violations, and More,” (or place this link into your browser: https://ddaily.wpengine.com/product/tougher-lab-regulations-and-new-legal-issues-in-2018-more-frequent-payer-audits-problems-with-contract-sales-reps-increased-liability-for-clia-lab-directors-proficiency-testing-violations-and).
This crucial learning event takes place on Wednesday, November 8, 2017, at 1 p.m. EST. Gee will be joined by Jeffrey J. Sherrin, President and Partner, O’Connell and Aronowitz in Albany, New York, and Richard Cooper, Chair, National Healthcare Practice Group, McDonald Hopkins, LLC, in Cleveland.
These three attorneys are among the nation’s foremost experts in issues unique to clinical laboratories, pathology groups, hospital labs, toxicology/pharmacogenomics labs, and molecular/genetic testing labs. Following our speakers’ presentations, there will be a question and answer period, during which you can submit your own specific questions to our experts.
You can’t afford to miss this opportunity. Click here to get up to speed on the most serious regulatory, compliance, and managed care contracting issues confronting all labs today. This webinar will provide solutions to the perils facing labs now and in 2018 by helping you map a proactive and effective course of action for your clinical lab or pathology group.
—Andrea Downing Peck
Related Information:
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Oct 4, 2017 | Coding, Billing, and Collections, Laboratory Management and Operations, Laboratory News, Laboratory Operations, Laboratory Pathology, Laboratory Testing
To help patients pay their clinical laboratory test bills, Sonora Quest Laboratories partners with CarePayment to provide patients with no-interest loans
With tens of millions of Americans now covered by a high-deductible health plan (HDHP), hospitals, physicians, and clinical laboratories now share a common problem: how to collect the full amount due for a patient who may have an annual deductible of $5,000 (individual) or $10,000 (family).
This is a significant problem for healthcare providers and Dark Daily has reported on this trend several times, most recently in “Hospitals, Pathology Groups, Clinical Labs Struggling to Collect Payments from Patients with High-Deductible Health Plans,” September 6, 2017.
Thus, many pathologists and clinical laboratory managers will be interested in a new solution that the largest commercial laboratory company in Arizona is using to help cope with the need to collect larger amounts of money from patients with a high-deductible health plan. Recently, Senora Quest Laboratories announced an innovative collaboration with healthcare finance company CarePayment to ensure cost is not a barrier to clinical laboratory and pathology patients needing medical tests.
Sonora Quest Laboratories, which performs more than 60-million diagnostic tests per year in Arizona, has established a new partnership with CarePayment of Nashville to provide no-interest loans to any Sonora Quest patient whose testing bill exceeds $100.
David Dexter, Chief Executive Officer at Sonora Quest Laboratories, believes patients have a right to “affordable access to much-needed laboratory testing.” In a statement, Dexter notes, “Across Arizona, rising out-of-pocket medical costs are impacting families’ budgets, and ultimately, their health. No one should delay having clinical testing done because they are worried about costs.
“Sonora Quest Laboratories understands the importance of making healthcare services affordable to consumers,” he added. “We are working with CarePayment to do our part to provide affordable access to much needed laboratory testing. We believe this will help improve testing compliance and lead to better outcomes for patients managing chronic disease or monitoring their overall wellness.”
Annual Deductibles Rise 153% for Workers
The annual deductible that patients must cover is climbing, not just in Arizona, but nationally. According to the Kaiser Family Foundation 2016 Employer Health Benefits Survey, the average worker’s annual deductible has gone up 153% from 2009 to 2016. In addition, after meeting their annual deductibles, most workers face additional cost sharing for hospital admission or outpatient surgery.
To address the problem of collecting these larger deductibles from patients and to avoid racking up patient bad debt, Healthcare Finance News (HFN) points out that hospitals and healthcare providers are looking for financial solutions that “benefit both sides of the patient-provider relationship.”
As the graph above illustrates, more workers each year find themselves enrolled in high-deductible health plans (HDHPs) they can barely afford. That’s why hospitals, medical laboratory companies, and financial services organizations are partnering to develop programs patients can use to make affordable payments on their healthcare bills. (Image copyright: Kaiser Family Foundation/Obeo Health.)
To fill this need, a new type of company is popping up: third-party finance companies. CarePayment is one example. These new companies want to partner with hospitals and other healthcare organizations to identify patients who need assistance with out-of-pocket expenses. After a patient’s insurance company pays its portion of a bill, patients are referred to the healthcare finance company, which charges the hospital or provider a “discount factor” on the accounts it establishes.
Helping Clinical Laboratories, Pathology Groups Collect from Patients
According to CarePayment, enrollment in its programs is voluntary, requires no application, and has no impact on a patient’s credit score. CarePayment states that providers “double net collections on average” when patients use its financing solutions.
Craig Hodges, CEO of CarePayment, maintains innovative payment solutions are necessary because of the increased consumer responsibility for healthcare costs. “There’s evidence out there that asking a consumer to pay interest on top of their out-of-pocket expense is impractical,” Hodges stated in the HFN article. “Consumer responsibility for the [the total] bill has grown from sub 5% to 25%. There’s a lot of sticker shock out there.”
Third-party healthcare finance companies are not the only alternative financing option open to healthcare providers. Healthcare Finance News points out that Docpay offers automated clearinghouse payment plans, which require the patient to preauthorize a payment schedule from their bank account or credit card, guaranteeing payments are made each month. A service fee is charged to the patient that covers credit card processing fees as well as payment plan fees. According to the company’s website, a healthcare practice receives a higher net collection percentage than if they used a third-party financing company or processed credit card payments in-house.
Banks Get into the Act to Help Physicians, Hospitals, Medical Laboratories
NBC News adds that some hospitals are partnering with banks to offer patients no-interest or low-interest loans as well, with the goal of offering patients more affordable payment options while increasing payment rates.
David and Nicole Rayman of Chatham, Ill., told NBC News a zero-interest hospital loan saved them from high-interest financing after they were hit with an unexpected $2,800 bill to remove a benign growth from David’s neck. Under terms of the loan, they paid $80 a month for 36 months.
“That’s going out to dinner one time a month, so that’s definitely something we could cut out,” Nicole Rayman stated in the NBC News article.
Failure to Collect Bills Directly from Patients
While Hodges predicts that healthcare financing could potentially be a $70-billion industry, he also notes that growth has been fueled by providers’ difficulty communicating costs with consumers and collecting bills directly from them.
“As those high-deductible health plans grew over time, providers realized they didn’t have the infrastructure to deal with that,” Hodges noted in the HFN article. “The portion of the bill the patient was responsible for used to be small. As that grew, providers didn’t have the experience, in-house, to interact with the consumer in a consumer-like environment.”
While medical laboratories and other providers have been slow to embrace price transparency, Hodges believes simplified and transparent financial responsibility will fuel healthcare consumerism and improve the provider-patient relationship.
“My theory is that we have to evolve to total transparency,” he told Healthcare Finance News. “Here’s what the service is going to cost you from an out-of-pocket perspective—that’s the first step.”
This development is another sign HDHPs are creating financial challenges for clinical laboratories and pathology groups as more patients are unable to pay out-of-pocket cost for testing services. In this environment, medical laboratory managers and pathology practice administrators will need a strategy for collecting payments from patients at the time of service.
—Andrea Downing Peck
Related Information:
Sonora Quest Laboratories Partners with CarePayment to Help Patients Pay for Clinical Testing
Kaiser Family Foundation 2016 Employer Health Benefits Survey
Healthcare Turns to Zero-Interest Loans to Give Patients a Better Reason to Pay
Some Hospitals Will Now Offer You an Interest Free Loan
To Handle Increased Bad Debt by Patients in High-Deductible Health Plans, Hospitals Are Offering Loan Programs
Hospitals, Pathology Groups, Clinical Labs Struggling to Collect Payments from Patients with High-Deductible Health Plans
